Metro Arcade sells tickets at $25 per person as a one-day entrance fee
Variable costs are $11 per person, and fixed costs are $52,500 per month.
Assume that Metro increases variable costs from $11 to $14 per person. Compute the new breakeven point in tickets and in sales dollars.
What will be an ideal response
Unit contribution margin = Net sales revenue per unit - Variable costs per unit
= $25 = $14 = $11
Required sales in units = (Fixed costs + Target profit) / Contribution margin per unit
= ($52,500 + $0 ) / $11
= 4,773 tickets
Required sales dollars = Selling price per ticket x Required ticket sales
= $25 x 4,773 = $119,325
You might also like to view...
Which of the following would most likely aid in the formation of a high-performance work system?
A. employees' rewards and compensation that relate to the company's financial performance B. work design that allows employees to use a single skill C. technology that is used to discourage flexibility D. employees that receive little formal performance feedback E. training that is discouraged because of increasing costs
When considering ________, accumulated evidence from several investigations increases our confidence that a causal relationship exists
A) the time order of occurrence of variables B) the role of evidence C) concomitant variation D) the elimination of other possible factors